3 HR Mistakes Every Small Business Needs to Avoid

by Business Case Studies on Thursday 18th May, 2017

Despite the wealth of resources accessible today, there are still a lot of common mistakes and bad decisions made by small business owners. These errors, no matter how small they may seem at first, have the potential of preventing small businesses from succeeding. There are even cases where a series of bad decisions thwarted small businesses despite the fact they had excellent products.

In this article, however, we are going to focus more on human resource management or HR. For small businesses, constructing a strong team is even more crucial. Here are the top three HR mistakes you need to avoid.

Rash Hiring Process

The last thing you want is to invite the wrong person into the team. As a small business, having a lean but effective team is a competitive advantage that makes all the difference. Unfortunately, many small business owners still take recruitment lightly.

Rushing the hiring process is a big mistake. You can’t expect to find the best candidates without spending enough time searching for them. It is even harder to choose the right candidates for a position when you don’t have enough time to go through all the details.

A rushed interview process, a bad job description on the recruitment ad, and searching for candidates through the wrong channels (i.e. placing a recruitment ad on Craigslist instead of LinkedIn) can all be catastrophic. You will end up with the wrong person for the job and the investment you made along the way will not give you a high return.

No HR Management

The second most common HR mistake found in small businesses is the lack of HR altogether. Yes, you have the right to manage your business as you see fit; you are the founder and the owner of the company after all. Nevertheless, you can’t take the business to the next level unless you start managing parts of it properly.

There is no need to invest a lot in experts or tools to have good HR management. Today, a lot of business process and workflows are available as services, known as Software as a Service or Solution as a Service (SaaS). There are HR SaaS to help you manage your company’s human resources better without spending a lot of money in the process. Solutions like XCDHR enable small businesses to have enterprise-grade human resources management.

Failure to Understand Regulations

Last, but certainly not least, always make sure you fully understand the laws regarding human resources. Misclassifying employees as contractors is a classic case in point. It may seem like a harmless thing to do, but the penalties for misclassifying employees can hamper your small business’s growth substantially.

Take the time to learn more about HR regulations, even when you’re not handling HRM yourself. As a business owner, it is important that you know the rules and regulations surrounding your team members and how to treat them.

Avoid these mistakes and you will have a much better human resource management experience, as well as a healthier business. Keeping the team efficient and supporting the growth of the company will be a lot easier to do with good HRM practices in place.